Sapura Energy posts 1Q losses on unfavourable forex, JVs

by ANIS HAZIM / pic credit: ANNUAL REPORT

SAPURA Energy Bhd posted a net loss of RM97.07 million for its first quarter ended April 30, 2021 (1Q22), against a net profit of RM14.21 million recorded in the same quarter last year as a result of unfavourable US dollar/ringgit exchange rate and a lower share of profit from associates and joint ventures (JVs).

Revenue for the quarter increased to RM1.47 billion from RM1.36 billion in 1Q21 mainly attributable to the higher revenue from engineering and construction (E&C), and drilling business segments, its exchange filing yesterday noted.

In a separate statement, group CEO Datuk Mohd Anuar Taib said the oil and gas (O&G) company continues to see challenges in a pandemic-stricken operating environment.

“Business continuity plans remain in force as the group prioritises the health and safety of our employees and contractors while delivering projects to clients.

“The group is cautiously optimistic it is well-positioned to deliver resilient performance in the financial year 2021 while remaining on track to deliver on longer-term strategic intents in embracing energy transition,” Mohd Anuar stated.

He added that the company is well-positioned to capitalise on the recovering energy industry, given the rebound in O&G demand and prices.

“We will continue to deepen our presence in the renewables sector to ensure we remain sustainable in the future,” Mohd Anuar said.

Sapura Energy’s orderbook stood at RM11.8 billion at the end of 1Q22, while total bids and prospects were valued at RM147 billion with RM51 billion worth of tenders having been submitted or are in progress.

The company has accumulated pandemic-related costs amounting to RM328 million and is currently engaging with its clients to acknowledge and resolve these costs for recovery.

The group’s exploration and production (E&P) segment, operated through its strategic partnership SapuraOMV Upstream Sdn Bhd, registered profit after tax and minority interests of RM104 million in the current quarter, a jump from the RM23 million after-tax loss and minority interests posted in the preceding quarter.

The group’s E&P segment continues to see strong growth prospects in its SK408 and SK310 production sharing contracts and significant upside potential from its exploration opportunities in Mexico, Australia and New Zealand.

The divestment of its oil producing assets in Peninsular Malaysia is expected to be completed in the second half of FY22, while the SK408 Jerun development is progressing as planned.

Sapura Energy’s drilling segment posted revenue of RM251.8 million in the current quarter, an increase of 4.5% compared to the revenue of RM240.9 million in 1Q21.

“This was mainly due to higher revenue from its Africa operations and mobilisation/demobilisation activities pursuant to increasing rig activities,” said Sapura Energy.

Meanwhile, its E&C segment recorded revenue of RM1.13 billion, which was 17.3% higher than the revenue of RM966.5 million in 1Q21, primarily due to higher activities in line with the progress of projects being executed.

“Sapura Energy’s E&C segment remains resilient across its operations, completing five offshore projects in 1Q22. Its fabrication yards and key fleet utilisation rates were maintained at 38% and 52% respectively,” said the O&G company.

Sapura Energy share price last traded at 13 sen yesterday, valuing the company at RM2.08 billion.